Armed conflicts most urgent risk to global economies – World Economic Forum

Global economies are facing declining optimism amid growing concerns about the impact of armed conflicts, according to an influential report.

However, climate change leading to extreme weather events remains the biggest concern over the long term, according to the World Economic Forum’s (WEF) annual global risk survey.

The report, released ahead of next week’s annual meeting in Davos, found that increased geopolitical pressures are causing growing uncertainty across the economy.

“Optimism is limited as the danger of miscalculation or misjudgement by political and military action,” the report said.

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The poll of more than 900 global risk experts, policymakers and industry leaders showed that the majority of respondents, 52%, are anticipating an “unsettled” global outlook over the next two years.

This is also linked to concerns over shifting trade policies, amid the threat of Donald Trump imposing new tariffs on other countries later this year.

The report also showed that a further 31% of respondents expect a “turbulent” backdrop in the next two years.

It comes after a turbulent year linked to a number of major international elections, increased tensions in the Middle East and the continued war in Ukraine.

The report found that state-based armed conflict was recorded as the top immediate risk for economies in 2025.

Almost a quarter of respondents highlight conflict as a key issue, reflecting heightened geopolitical tensions.

Mirek Dusek, managing director of the World Economic Forum, said: “Many respondents expect a stormy or turbulent outlook for the next two years.

“That seems to indicate that there is this sense of uncertainty around the future.

“We can assume this is also connected to the fact we live in a very complex geopolitical environment – we unfortunately have a record number of conflicts around the world.”

Misinformation and disinformation were also highlighted as a key risk over the near future amid the rapid growth of AI (artificial intelligence).

Meanwhile, environmental risks are highlighted as the main problem for the next 10 years, led by extreme weather events, biodiversity loss and ecosystem collapse.